This chapter examines the nature of environmental intelligence (EI) as it applies to marketing strategy. Marketing researchers need to maintain constant surveillance for any and all changes in the environment that may impact, favorably or unfavorably, on business conditions. By setting up an on-line environmental scanning system, the web-wise researcher can maintain a constant 24/7 vigil over the vast information- laden Internet landscape.

The objectives of this chapter are to:

• Define environmental intelligence.

• Explain the phenomenon of environmental scanning and why it is an essential analysis that should be carried out by every organization.

• Demonstrate the utility of the Internet as a means for gathering environmental intelligence for marketing management.

Environmental intelligence is derived through the analysis and synthesis of information about changing macro-environmental variables. Scanning and analysis focuses on changes in the political-legal, economic, socio-cultural and technological environments, often characterized with the acronym PEST. Some researchers include the physical environment in their monitoring activities as well. In so much as chronic and acute weather patterns and related ecological factors such as pollution, product bio-degradability and "environmental- correctness" can and do have a profound impact on brand perceptions and product sales.

The relationship between an organization and the environment is highly interactive, and has a direct bearing on an organization's viability. Constant monitoring and analysis of the macro-environment is critical if an organization wants to detect trends and events that pose marketing threats and/or opportunities to business.

In order to discern those trends and events that will affect the performance or survival of the organization either directly or indirectly, EI should be undertaken as a formalized and on-going activity. Figure 4-2 delineates the steps involved in conducting environmental analysis (Aguilar, 1967).

Figure 4-2 STEPS IN ENVIRONMENTAL ANALYSIS

"Environmental scanning is the acquisition and use of information about events, trends, and relationships in an organization's external environment, the knowledge of which would assist management in planning the organization's future course of action…. Environmental scanning includes both looking at information (viewing) and looking for information (searching). It could range from a casual conversation at the lunch table or a chance observation of an angry customer, to a formal market research program or a scenario planning exercise" (Choo, 1995). Environmental scanning can vary in scope as well as style. With respect to scope, environmental scanning can take a wide-angle look "at the total environment so as to develop a broad picture, and identify areas that require closer attention. Or, scanning can zoom in on specific areas and analyze them in detail (Choo, 1995). In addition to adjusting it’s scope, an organization can vary the style it employs in information collection. Figure 4-3 delineates four distinct styles of scanning, originally suggested by Aguilar (1967):

Figure 4-3 Styles of Environmental Scanning

Environmental scanning may best be viewed as a process wherein information on key environmental variables is gathered, evaluated and incorporated into everyday decision-making and long-term strategic planning. In today’s global village, trends, events and emerging issues from anywhere can at anytime impact significantly on an organization's ability to meet its immediate mandate or achieve its strategic goals.

The Internet is an  unmatched resource of information. The Internet’s search engines, intelligent agents and "knowbots" are unparalleled in their speed and ability to cull information. Moreover, with more timely and accurate information, analysts should be better able to track trends and interpret issues; and generally become more adept in responding to market needs and macro-environmental forces. The Internet enables the organization's knowledge network to expand, as more people in the organization tap into external knowledge, and as connections are made with relevant expertise and advice outside the organization. Effective use of the Internet can reduce the randomness and increase the relevancy of information used in decision-making. Accordingly, the Internet may prove to be the most essential component in one’s environmental scanning system.

When constructing an Internet scanning system to monitor changes in macro- environment, web sites should be selected according to a "mixed scanning" strategy. That is, web sites selected should be "high-order", and scan the total environment, as well as "low-order" --wherein specific areas are covered in detail. Accordingly, low-order web sites will be geographically distinct, and/or industry, product class and brand specific.

The following sections define each macro-environmental sector and highlights web sites that can be used in monitoring and analysis.

There are a number of sites that provide the EI researcher with a wealth of data on all aspects of the macro-environment. Some sites (globalEDGE©, UNESCO, Global Trends 2015, World Factbook) cover the entire world; others (FedStats, J GUIDE, LANIC) provide comprehensive coverage of macro-environmental variables for the U.S, Japan and Latin America.

GlobalEDGE© is a global business knowledge web-portal that connects international business professionals worldwide to a wealth of information, insights, and learning resources on global business activities. By serving as a gateway to specialized knowledge on countries, cross-border business transactions, and cross-cultural management, globalEDGE© responds to a real interest expressed by an increasing number of global business professionals. It also creates a virtual community of both executives and academics with like interests.

UNESCO (United Nations Educational, Scientific and Cultural Organization) provides information on : Publications; Statistics; UNESCO partners; Information services; and, current events.

There are numerous government web sites from around the world that provide consumer intelligence data. Yahoo! Provides a list of several of these services at the following URL: http://www.yahoo.com/Government/Statistics

Global Trends 2015: (Dec.2000)- under the authority of the Director of Central Intelligence. Global Trends 2015 provides a comprehensive analysis of the future. The report’s "purpose is to rise above short-term, tactical considerations and provide a longer-term, strategic perspective. Judgments about demographic and natural resource trends are based primarily on informed extrapolation of existing trends. In contrast, many judgments about science and technology, economic growth, globalisation, governance, and the nature of conflict represent a distillation of views of experts inside and outside the United States Government."

Herein, information is available on the geography, demographics, government, and economy of countries, territories, and regions of interest (e.g., Antarctica, the Gaza strip). A number of sites provide comprehensive statistics and profiles of consumers’ demographic characteristics.

Provides timely economic information, with comprehensive data and analyses at the metro, state, and national levels. This authoritative site also has data and analyses of global issues, including situations facing Asia, South America, and Europe. Visitors can rank states and metro areas on more than 100 economic, socio-economic, and demo graphic categories.

FedStats contains official statistical information, which is available to the general public, and put together by over 70 federal agencies. Information is sorted by topics listed alphabetically, subject area, agencies, key words, or press releases. The statistical information is maintained and updated by federal agencies on their own web servers. Businesses can use this to get information on the overall industry they are in and examine overall trends, or acquire information on their target market.

The following topics are included at this site: References; Indices and Guides; Business, Economics, and finance; Language and Culture; Politics and Government; History and Geography; and, various other topics.

This site of The University of Texas provides an extensive source of information on Latin America and lists itself as the most complete library of Latin American Studies on the web. There is a Country Directory and Subject Directory. Some of the subjects include Statistics; Trade; Newspapers; Reference; Economy; History, Libraries and many more.

The Politico-legal environment has a direct and significant affect on marketing. Product and service standards, business practices, packaging and advertising are all strictly regulated. One must know and one must obey the law- period. Legislation affecting business is increasingly complex and constantly changing. Regulation occurs at all levels of government--federal, state, and local – and can occur within non-government agencies such as Better Business Bureau’s and professional review boards. Public and private consumer interest groups may also monitor an industry’s marketing practices and thus influence marketing activities. All of these official, professional and grassroots regulatory bodies can be monitored through a multitude of web sites that cover the gamut of the politico-legal environment. When it comes to finding most any law at any level in most developed counties the Internet is at its best. To wit:

American Law Sources On-line http://www.lawsource.com/also/--A comprehensive web site is American law sources on-line – Which "provides a comprehensive, uniform, and useful compilation of links to all on-line sources of American law that are available without charge. This site contains additional links to sources of commentary and practice aids that are available without charge (or available at a reasonable charge from governmental and non-profit providers)."

• Lexis- legal express information service http://www.michie.com/-Provides links to a wide range of legal sites and resources.

• Australia Legal Information Centre http://www.wwlia.org/as-home.htm-  Provides fast access to the latest Australian and international legal, law, court and legislative information on the World Wide Web.

• The Better Business Bureau http://www.bbb.org/ - At the grassroots level, the thousands of branches of the Better Business Bureau throughout the world can also be located and contacted via the Internet.

An excellent guide to web sites covering politics is provided by

http://www.wheretodoresearch.com/

 Herein, one will find links to:

Global Economy Indicators
Real-time coverage of the global
economy. Analysis, data, forecasts.
www.economy.com/dismal

The Economic environment is monitored for business cycles, variations in inflation and interest rates, prices, investments, savings, and income and employment levels.

The socio-cultural environment is an amalgamation of people’s attitudes, interests, values, norms, customs, beliefs, aesthetics and lifestyles. The socio-cultural environment exerts a profound influence on people’s perceptions of and preferences for any and every product and service. Indeed, as Kotler (1998) noted socio-cultural values impact people’s view of everything:

A marketing manager must be cognizant of long-term cultural trends, as well as the latest social fads and fashions. Socio-cultural change tends to evolve slowly, but have far-reaching effects. "Trends are predictive because they start small, then gather momentum. If you can connect the dots between the inception of a trend and the impact it will have on your business, then you can fine-tune your product to fit the trend" (Popcorn, 1991). For the past three decades a number of social movements have coalesced and gathered continual momentum. Civil rights followed by women’s rights, environmentalism, consumer rights, "political correctness," and the antithetical forces of nationalism and multiculturalism. Concomitant with these movements, consumers also exhibited growing concern with health and nutrition, personal security, self-indulgence. As each of these trends evolved, it eventually influenced the nature and scope of products and services desired by consumers.

Within every society, the socio-cultural environment will affect different subgroups of people in different ways. Assessing the variation across sub-group segments is often one of the greatest challenges marketing managers will face when planning strategies, especially for international markets. Beyond its affect on specific issues and items, the socio-cultural environment influences the entire business climate and general "zeitgeist" ("spirit-of-the-times") of society. The consumer and environmental movements are social forces within the environment that exert legal, moral, and economic pressures on business. The public's trust in business and government and confidence in the economy influences sales and legislation, that in turn regulates business practices and marketing strategies.

Tracking social and cultural values is critical if the marketer wants keep a business or product "on-trend."

If one is thinking of out-sourcing the scanning and analysis of the socio-cultural environment, Iconoculture is one service listed on the Internet, which can be considered.

• http://www.iconoculture.com/

 Iconoculture offers its services through consulting and presentations it has a  newsletter,-- Iconoculture is a unique resource for companies interested in using cultural trends as a means to gain a competitive edge. "Our fundamental philosophy is not only to identify current and emerging trends, but also to decode the consumer values and attitudes driving the trends; And translate trend information into culturally acute strategic plans, scenario planning, new products, brand positionings, and brandnames…. Our research is observational, anthropological, ethnographic and voyeuristic. We focus on behavior versus belief, on what consumers are doing versus what they say they are doing. Our cultural snapshots of people, places, and things put real faces and names on your data. We learn what's next and tell you what to do with it."

Iconoculture gains its 360-degree perspective of the consumer through a number of techniques, including: Immersion in print, broadcast, and online media; Extensive domestic and international travel; Networking with other "cultural fluents" around the world, including teens, Gen X, boomers and seniors; Anthropological and ethnographic research; Cultural sleuthing and voyeurism. Iconoculture’s clients include predominantly service and package goods companies and advertising agencies.

Other resources monitoring what consumers think:

• Gallup http://www.gallup.com/

• Roper Starch Worldwide http://www.roper.com

• The Roper Center for Public Opinion Research http://www.ropercenter.uconn.edu

• Yanlelovich http://www.yankelovich.com

• Roy Morgan Research http://www.roymorgan.com.au

If one is interested in finding out what Australians think about current political, economic and social issues, there is the Roy Morgan Poll. With new releases published every week the Morgan Poll tracks a wide range of issues, moreover the site contains a searchable archive of previous polls.

The Odum Institute maintains one of the oldest and largest archives of machine-readable data in the U.S. Its Louis Harris Data Center is the exclusive national repository for Louis Harris public opinion data. Its National Network of State Polls archive is recognized as the largest available collection of state-level surveys. Also available are data from studies conducted by UNC social science faculty.

Other sites one can research for information on socio-cultural trends include:

• U.S. Census Bureau  http://www.census.gov

• Asian Demographics… http://www.asiandemographics.com - ...offers detailed information about the demographic and socio-economic trends of twelve Asian countries. The company also provides demographic profiles, demographic forecasts, and household income models of each country for a fee. For those interested in trading in Asian markets, this site is a great resource.

The technological environment is not only the most dynamic force shaping human destiny (Kotler, 1998) it is the most potent force shaping marketing research and strategy. Technological innovations in product development, manufacturing, and marketing make new products available everyday and other products obsolete overnight.

http://www.uspto.gov

The Physical Environment:

Bio-genetically altered foods, the eco-impact of packaging, increased pollution levels and energy shortages have for the past two decades significantly impacted on consumers’ attitudes and lifestyles. Indeed, an entirely new branch of marketing –known as "green marketing" – has manifested itself in response to consumers’ concerns for these and other environmental issues. Thus, for the "environmentally-correct" marketer environmental intelligence would necessarily include information on the physical environment. Some of the best and most comprehensive resources on the environment include:

• GlobalSpine http://www.globalspine.com

Operating under the motto:" Those who best adapt to their environment survive in today’s business world"-- SPINE (Sustainable Product Information Network for the Environment) provides users with integrated tools for environmental management —"for businesses with a serious environmental commitment."

See also:

Marketing researchers need to maintain constant surveillance for any and all changes in the macro-environment that may impact on business conditions. Environmental intelligence is information about changing macro-environmental variables that is incorporated into an organizations’ marketing strategy. The macro-environment is comprised of political/legal, economic, socio-cultural, technological, and physical sectors.

Environmental scanning may be best viewed as a process wherein information on key macro-environmental variables is gathered, evaluated and incorporated into everyday decision-making and long-term strategic planning. Scanning the environmental is vital for every business-- as it can determine the difference between simply surviving versus thriving. Environmental scanning gives organizations an edge over its competitors in a complex and rapidly changing business climate. Environmental scanning can vary in scope as well as style. In scope, environmental scanning can be high level or low-level. In style, environmental scanning can range from undirected and conditional, and informal to formal.

Aguilar F. (1967) Scanning the Business Environment. New York- MacMillan

Burrus, D. (1998) Use Technology o Outpace Your Competition, cited from of Burrus Research Associates, Inc. http://www.speaking.com/articles/articles,b/burrusarticle2.html

Chun Wei Choo (1995) Information Management for the Intelligent Organisation : The Art of Scanning the Environment. ASIS Monograph Series. Information Today/Learned Information. Medford, New Jersey.

http://choo.fis.utoronto.ca/FIS/IMIO/IMIO4.html

Kotler P, Chandler, Brown & Adam (1998) Marketing. 4th Ed Prentice Hall

Morrison, James L., "Establishing an Environmental Scanning Process", Edinboro University (http://horizon.unc.edu/projects/seminars/Edinboro/page13.asp)

Morrison, James L and William G. Held (1989) "Developing Environmental Scanning/Forecasting Systems to Augment Community College Planning" VCCA Journal, Volume 4, Number 1, Spring/Summer 1989, 12-20 (http://www.br.cc.va.us/vcca/mor.html)

Popcorn, F. (1991) The Popcorn Report. Harper Business

Stanton W, Millier K & Layton R. (1992) Fundamentals of Marketing. McGraw Hill